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Why would the Allowance for Doubtful Accounts have a debit balance? Does that mean that the...

Why would the Allowance for Doubtful Accounts have a debit balance? Does that mean that the company did something wrong?
2. What fixed asset do you personally own? Why do you consider it a fixed asset and not a current asset?

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Answer #1

1) Allowance For Doubtful Accounts have debit balance because the amount of actual bad debts written off is greater than the Provision For Doubtful Debts / Allowance for Doubtful Accounts. This happens when company doesn't charge enough amount of bad debt during the accounting period.

2) I own a car. I consider it as a fixed asset because I'm going to get future economic benefits from it for more than 12 months, and because its going to provide me benefits for more than 12 months, it cannot be considered as a current asset.

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